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The following questions and answers (Q&As) are intended to provide guidance on deemed export issues addressed in the Export Administration Regulations (EAR) and in the Federal Register Notice entitled “Revisions and Clarification of Deemed Export Related Regulatory Requirements” (RIN 0694-AD29) published on May 31, 2006. The notice published on May 31 did not change any provisions of the EAR; rather, it addressed certain recommendations made by the Department of Commerce Office of Inspector General (OIG) in its report entitled “Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S.” (Final Inspection Report No. IPE-16176-March 2004), and it withdrew an earlier Advanced Notice of Proposed Rulemaking. These Q&As provide additional guidance in areas which have generated both significant interest and confusion subsequent to the OIG Report. For additional clarification on deemed exports beyond these Q&As, please contact Alex Lopes, Director, Deemed Exports and Electronics Division by email: alopes@bis.doc.gov or phone: 202-482-9163.
The Federal Register Notice: “Revisions and Clarification of Deemed Export Related Regulatory Requirements” (RIN 0694-AD29) can be reviewed in its entirety at:
http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-8370.pdf
Question (1): My company just hired a foreign national employee who was recently admitted for permanent residence in the U.S. Do I need to apply for a deemed export license in order to transfer export-controlled technology to her?
Answer (1): No. Lawful U.S. permanent residents are not subject to the deemed export rule.
The deemed export rule does not apply to individuals who are:
a) U.S. citizens;
b) Persons lawfully admitted for permanent residence in the U.S.; or
c) Protected individuals under the Immigration and Naturalization Act (8 U.S.C. 1324b(a)(3)).
If individuals in your organization fit into any of the three categories above, you need not apply for a deemed export license before transferring export controlled technology to them. For additional guidance on this topic, see part 734.2(b)(2)(ii) of the EAR.
Question (2): How do I treat foreign nationals with dual-citizenship under the deemed export rule?
Answer (2):
BIS recognizes an individual’s most recent country of citizenship or permanent residency as his or her home country for licensing requirements.
For example, if an individual is a citizen of China, but most recently became a Canadian citizen, then under the BIS deemed export licensing policy, we would recognize this individual as a Canadian for licensing purposes. In this example, export control licensing requirements for Canada would apply to this individual.
If an exporter is uncertain which country of origin should be used for deemed export license purposes or has a concern regarding a foreign national’s dual-citizenship status, then the exporter should contact BIS for further guidance and resolution (see Question (4)).
Question (3): How do I determine the deemed export licensing requirements for individuals with non-U.S. permanent residence status?
Answer (3):
BIS policy is to recognize an individual’s most recent country of citizenship or permanent residency as his or her home country for licensing purposes.
For example, if an individual is a citizen of India, but has obtained permanent residency in the United Kingdom (U.K.), then this individual would be recognized as a U.K. permanent resident for licensing purposes. In this example, that means that this individual would be required to obtain a license only for technology which is export controlled to the U.K.
Question (4): What happens if an individual’s most recent citizenship or residency cannot be determined?
Answer (4):
If, for some reason, the status of a foreign national is not certain, then you should seek an advisory opinion from BIS to determine where the stronger ties lie, based on the facts of the specific case.
In response to a request for the status of a foreign national, BIS will look at the foreign national’s family, professional, financial, and employment ties.
For additional guidance on this topic please refer to questions 5-11 at the following BIS link: http://www.bis.doc.gov/DeemedExports/DeemedExportsFAQs.html.
Question (1): How do I determine if “use” technology available to a foreign national here in the United States requires a deemed export license?
Answer (1):
The EAR outlines specific parameters to determine whether technology is subject to the EAR or whether technology is not subject to the EAR.
“Use” technology that is not subject to the EAR and therefore not subject to deemed export licensing includes:
Items that are exclusively controlled for export or reexport by other U.S. government agencies;
Prerecorded records, printed books, pamphlets and miscellaneous publications; or,
Publicly available technology and software (excluding encryption), which includes: i) information already published or that will be published, see part 734.7; ii) information arising during or resulting from fundamental research, see part 734.8; iii) information which is educational, see part 734.9 and iv) information included in certain patent applications, see part 734.10.
If the “use” technology available to your foreign national falls into any of the above categories, then it is not subject to the EAR, and thus, a deemed export license is not required.
If you determine that the “use” technology available to your foreign national does not fall into any of the above categories, it may be subject to deemed export licensing depending on the commodity classification of the “use” technology and the country of origin of the foreign national.
Question (2): Using the above guidelines, I have determined that the “use” technology to be released to a foreign national is subject to the EAR. How can I determine the commodity classification of the “use” technology?
Answer (2):
The EAR defines “use” technology as specific information necessary for the “operation, installation (including on-site installation), maintenance (checking), repair, overhaul and refurbishing” of a product. See Part 772, definitions of “technology” and “use.” If the technology available to the foreign national does not meet all of these attributes, then it is not “use” technology for deemed export licensing purposes.
If the technology at issue does meet all of these attributes, then it constitutes “use” technology. Pursuant to the General Technology Note in Supplement 2, part 774 of the EAR, the export of “technology” that is “required” for the “use” of items on the Commerce Control List (CCL) is controlled according to the provisions in each Category. This means that you must first determine whether the “use” technology associated with an item is listed on the CCL, and then, following the usual rules of the CCL and the associated Country Chart, you must determine whether a license is required to export the “use” technology at issue to the home country of the foreign national.
In other words, the commodity classification and licensing procedures for “use” technology are the same as for any item on the CCL. You should determine whether a particular Export Control Classification Number (ECCN) is associated with the particular “use” technology you have, and if so, then determine whether a license is required for the release of that “use” technology to a particular country.
If you plan to release controlled “use” technology to a foreign national, and a license would be required to export that “use” technology to the home country of that foreign national, then you must apply for a license before releasing the “use” technology to that foreign national.
Also note that “required” technology, as applied to “use” “technology” or “software,” refers to only that portion of “technology” or “software” which is peculiarly responsible for achieving or exceeding the controlled performance levels, characteristics or functions.
If the “use” technology does not enable an operator:
to replicate or improve the design of the controlled item being operated; and,
the operation of the controlled item is not directly related to the production, development or use of a nuclear explosive, chemical or biological weapon, or missile or rocket system;
then, the “use” technology does not meet the “required” threshold and is likely classified as EAR99.
Question (3): Does this mean that my foreign national employee, researcher or student needs a deemed export license to operate export controlled equipment?
Answer (3):
Question (4): Is there a deemed export license requirement for EAR99 technology?
Answer (4):
Under the EAR, releases of EAR99 technology to Cuban nationals require a deemed export license. See §746.2 of the EAR. In addition, releases of EAR99 technology to certain persons described in part 744 of the EAR including [but not limited to] Specially Designated Global Terrorists require a deemed export license. See, e.g., §744.12 of the EAR.
Additionally, pursuant to the Iranian Transactions Regulations maintained by the Department of the Treasury's Office of Foreign Assets Control, certain releases of EAR99 technology require a license from OFAC. See 31 C.F.R. §560.418.
For all other foreign nationals, EAR99 technology may be released without a license, unless you know that the foreign national intends to use such technology in activities related to nuclear, chemical or biological weapons or missiles as described in Part 744 of the EAR.
Question (1): Do I need authorization for a foreign graduate student to work in my laboratory?
Answer (1):
You do not need a license or authorization for the mere presence of a foreign graduate student in your laboratory. You do need a license if you plan to transfer controlled technology to a foreign national and the export of that technology is restricted to the foreign national’s home country.
The EAR license requirements apply to the transfer of controlled technology for “development”, “production”, or “use” of certain equipment. See Part 772 for definitions of all three terms.
If the graduate student is receiving technology that has already been published, then that technology is not subject to the EAR and no license is required for the release of that technology. See §734.3(b)(3) and §734.7 (defining published technology). BIS considers user manuals for equipment to be “published” when they are available from the manufacturer, either (1) for purchase at a price that does not exceed the cost of distribution, or (2) as part of the normal materials that accompany the equipment when sold to the public and without restrictions on further distribution.
If the graduate student is receiving technology in the context of instruction in a catalog course (or associated teaching laboratories) of an academic institution, then that technology is not subject to the EAR and no license is required for the release of that technology. See §734.3(b)(3)(iii) and §734.9.
If the graduate student is receiving technology that arises during, or results from, “fundamental research,” then that technology is not subject to the EAR and no license is required for the release of that technology. See §734.3(b)(3)(ii) and §734.8.
But if you plan to release technology that is subject to the EAR and that is, according to the CCL and Country Chart, restricted for export to the home country of the foreign graduate student, then you will need a deemed export license.